European Fiscal Harmonization and the French Economy
October 1, 1990
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Summary
This paper examines the implications of European fiscal harmonization for the French economy using a general equilibrium model. The latter extends the overlapping generations simulation model of Auerbach and Kotlikoff in three ways. A well-developed external sector is included. Households face constraints in their borrowing. The population comprises “rich” and “poor” households with different labor productivities. The harmonization policy that involves cuts in VAT and savings taxes leads to welfare losses for both rich and poor approximately equivalent to one percent of GDP.
Subject: Consumption, Consumption taxes, Income and capital gains taxes, National accounts, Personal income tax, Taxes, Value-added tax
Keywords: benefits household, Consumption, Consumption taxes, cost of capital, exchange rate, fiscal drag, harmonization reform, Income and capital gains taxes, interest rate, lump sum, lump sum tax, open economy, Personal income tax, profit tax, savings tax, tax harmonization reform, utility function, Value-added tax, VAT system, wage tax, WP
Pages:
52
Volume:
1990
DOI:
---
Issue:
096
Series:
Working Paper No. 1990/096
Stock No:
WPIEA0961990
ISBN:
9781451949933
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 38, No. 2, June 1991.
